TMI Blog2019 (5) TMI 1316X X X X Extracts X X X X X X X X Extracts X X X X ..... rom doubt, to say the least. A question arises as to whether an assessee can be imputed with clairvoyance where some amendment has been brought with retrospective effect whereby tax liability is sought to be imposed on assessee. In the instant case, section 13(8) of the Act has been enacted by Finance Act, 2012 with retrospective effect from 01/04/2009. As per aforesaid enactment, benefit of section 11 12 will not be available to the assessee where such assessee is in receipt of income which falls under proviso to clause (15) of section 2 of the Act. Admittedly, the aforesaid amendment seeking to deny benefit of s.11 to the assessee was not in existence at the time of filing of return of income. The action of the AO fails on both counts, namely; (i) the penalty is rightly held to be not applicable where the issue involved is so complex and debatable and the assessee had adopted a view which is quite plausible and endorsed favourably by judicial precedents at many instances. (ii) The income arising on retrospective applicability of section 13(8) inserted by Finance Act, 2012 i.e. at a time when the returns for all the assessment years in question were already filed by assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e particulars of income and has wrongly claimed exemption under s.11 12 of the Act which is not entitled to the cricket association on the nature of income generated, by it. It was inter alia observed that the definition of charitable purpose in section 2(15) clearly debars the income from activity in the nature of business trade or commerce towards advancement of object of general public utilityfrom exemption under s.11 12 of the Act in the hands of recipient. It was inter alia observed that the receipts from carrying out activities in the nature of trade/commerce/business as specified in proviso to s.2(15) of the Act is excluded from the purview of section 11 12 in view of section 13(8) of the Act. The Assessing Officer accordingly imposed penalty of ₹ 1,75,30,355/- on wrong claim of exemption under s.11 12 of the Act in defiance of law. 5. Against aforesaid action of the Assessing Officer, the assessee preferred appeal before the CIT(A). The CIT(A) allowed the appeal of the assessee by deleting the penalty imposed under s.271(1)(c) of the Act broadly on the ground that there is a difference of opinion regarding applicability of proviso to section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment of Hon'ble Supreme Court in the case of CIT v/s. Reliance Petroproducts P.Ltd. 230 CTR 320. Further, it has also relied upon the judgrnent of Hon'ble Gujarat High Court in the case of Sarabhal Chemicals P.Ltd. v/s. CIT 257 ITR 355 (Guj.). 8. I have gone through the various case law relied upon by the appellant as well as submissions made by the appellant on the merits of the case. It cannot be denied that assessment proceedings and penal proceedings are separate proceedings. It is apparent that there is difference of opinion regarding applicability of proviso to section 2(15) r.w.s. 13(8) of the Act. It is the opinion of A.O. that proviso to section 2(15) is attracted because of the nature of activities undertaken by the appellant. CIT(A) has confirmed the additions/disallowances made by the A.O. Based on the bonafide belief that its activities are not covered by proviso to section 2(15) of the Act, appellant has claimed benefit of section 11 12 of the Act. Appellant has diselosecLall the facts with regard to the activities undertaken by it. Nowhere in the order of assessment as well as penalty order, the A.O. has questioned the genuineness of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons, the assessee cannot be charged with any defiance of law per se when the section 13(8) itself was not in existence at the time of filing of the return of income and was enacted with retrospective effect at a later stage by Finance Act, 2012. The Ld.AR further submitted that the issue as to whether the case of the assessee falls within the ambit of proviso to section 2(15) itself is highly complex and debatable and therefore it is not possible for anybody to readily infer the correct position of law. For such a claim where several judicial pronouncements have been rendered in favour of assessee, the action of the assessee cannot be seen as malafide of any sort. The AR referred to the decision of Coordinate Bench in Gujarat Cricket Association vs. JCIT (Exemption) Ahmedabad and Ors. in ITA No.1257/Ahd/2013 and Ors order dated 24/01/2019 to contend that after a very detailed and lengthy discussion on the very subject, the Coordinate Bench has concluded that proviso to section 2(15) is not applicable to the nature of income generated by assessee and consequently assessee is entitled to exemption under s.11 12 of the Act. The Ld.AR submitted that on the face of me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see cannot be imputed with clairvoyance. When the return was filed, the assessee could not possibly have known that the decision on the basis of which cash compensatory support had been claimed as not amounting to the assessee's income ceased to be operative by reason of retrospective legislation. Further, Article 20(1) of the Constitution of India provides certain protection in this regard which states that no person can be convicted for any offence except for a violation of a law in force at the time of action charged an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of offence. Therefore, where the taxpayer complies with the law as actually existed at the earlier point of time prior to the retrospective change and files return in accordance with law as it existed at that date, imposition of penalty on the grounds of retrospective amendment would be unjustified. 9.4. Similar issue came up for consideration before the Hon ble High Court of Bombay in the case of CIT vs. Yahoo India Pvt. Ltd. (2013) 33 taxmann.com 332 (Bom.). In this case, the assessee (Yah ..... X X X X Extracts X X X X X X X X Extracts X X X X
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